Please consult our new Guides section on Buying a property in France: Promesse de Vente/ Compromis de Vente You have been to French property exhibitions; you have travelled around the many French regions and seen many properties. You have now at last found without any doubt the house or the apartment of your dream and you want to buy it. Your only concern now is to make sure that the vendor cannot sell the property to another purchaser. To cover this potential problem, you and the vendor must sign a contract which binds at least the vendor to sell his/her property and allows time for the Notaire to collect the documents needed for the final deed.The first question you may ask is who has got the authority to draw up such a contract?
The answer is that all lawyers in France (Notaires and Avocats)and estate agents can prepare this contract. It is very important to be sure that the estate agent you deal with has got a mandatory licence called Carte professionelle which allows him to hold funds for his clients because very often the estate agent holds the deposit as Stakeholder.
The next step is to know which sort of contract you are being asked to sign. It is at this stage that people who do not understand French (and even others) must seek advice from a French or international bilingual lawyer.
You will be surprised to learn that there are two sorts of contracts called a Promesse de Vente (promise to sell) and a Compromis de vente (contract of sale) whose effects and consequences are different and you will be even more surprised to know that you are more likely to sign a Promesse de Venteif you are north of the river Loire and a Compromis de Venteif are south! But before explaining in this first article la Promesse de vente and in the articles to follow le Compromis, it is essential in this introduction to remind you of the most important let out clauses which allow the purchaser of a French house or flat to withdraw from the contract and get back the deposit.
These let out clauses can be inserted either in the Promesse de vente or in the Compromis de vente.The purchaser would be wise to bear in mind the following get out clauses:
You must think about your financial arrangements before signing any contract, but in order to protect the individual, a French Law dated 13th July 1979 called Loi Scrivenersays that all contracts for the sale of a dwelling-house or a dwelling and commercial properly must indicate if the purchaser wants to obtain a loan:
The searches at the land registry relating to the property must not show any mortgage that the sale price would not fully cover.
Other French let-out clauses can be inserted in the contract, for instance:
Please consult our new Guides section on Buying a property in France: Promesse de Vente / Compromis de Vente
With the Promesse de ventethe vendor is obliged to sell the purchaser the property at the agreed price. The buyer benefits from a delay to make up their mind and tell their final decision to the vendor. It is the vendor who is committed not the purchaser. As we have explained above this delay is essentially for the Notaire to collect the necessary documents and to meet the let out clauses. In practice it would be wise to provide a period of two or three months which is specifically mentioned in the contract.
At the same time that the purchaser signs a Promesse de ventehe pays to a Stakeholder a deposit (usually 10% of the purchase price). The Stakeholder in most cases is the Notaire or the estate agent.
In resumé this deposit will be deducted from the purchase price if the final deed is signed. If however the purchaser wanted for personal reasons not to proceed with the purchase then the deposit will be paid to the vendor as damages.
On the option day (which is at the end of the time allowed for the purchaser to make up his mind - usually two months) and if all the let out clauses are met, the purchaser has the choice of proceedings to buy or not.
If he wants to buy he must notify the vendor by giving notice either via the bailiff or by recorded letter with advice of delivery. And at the same lime, it is quite normal to send to the Notaire, who draws up the final deed, the balance of the money for the purchase and the Notaires fees.
Be warned that there is an important formality to be carried out when a Promesse de vente has been signed. If the Promesse de vente is not signed before a French Notaire the document must be registered at the Tax Office within ten days otherwise the Promesse de vente is null and void (act 1840 A Tax Code). The registration fees are roughly 72 Euros.
Finally you must bear in mind that under the terms of a Promesse de vente, the purchaser cannot be compelled to buy.